Goldman Sachs posts $1.81 bln profit, stock issue

Monday, April 13, 2009 at 10:37 PM Posted by Beijing News


US banking giant Goldman Sachs reported Monday a quarterly net profit that far exceeded market expectations and announced a massive five-billion-dollar share issue to help repay government aid.

In a surprise announcement after market close, Goldman Sachs reported first-quarter net profit of 1.81 billion dollars with earnings per share of 3.39 dollars, sharply higher than 1.33 dollars per share forecast by most analysts.

The profit came on the back of revenues of 9.43 billion dollars in the first quarter, which ended on March 27.

For the 2008 fourth quarter that ended November 28, Goldman posted a net loss of 2.12 billion dollars, the company said.

"Given the difficult market conditions, we are pleased with this quarter's performance," Lloyd Blankfein, Goldman's chairman and chief executive, said in the statement.

"Our results reflect the strength and diversity of our client franchise, the resilience of our business model and the dedication and focus of our people."

In a separate statement, the bank announced it would put five billion dollars in common stock on the market to help it raise cash to repay a government rescue of 10 billion dollars.

Goldman, one of the major US banks undergoing "stress tests" by federal authorities to determine their viability, said it hoped the capital raised in the share offer would allow it to repay all of the public money injected through the Treasury's Troubled Asset Relief Program.

"After the completion of the stress assessment, if permitted by our supervisors and if supported by the results of the stress assessment, Goldman Sachs would like to use the capital raised plus additional resources to redeem all of the TARP capital," the company said.

Goldman and some other financial firms have indicated in recent weeks that they want to quickly pay back the federal funds because of the government conditions affecting their management.

Goldman previously had scheduled its earnings announcement for early Tuesday, before the New York stock market opening.

It maintained its earnings conference call with analysts on Tuesday at 1100 GMT.

Its first-quarter results are not directly comparable to those of the 2008 first quarter, which ended in late February and saw net profit of 1.51 billion dollars.

Goldman Sachs subsequently switched from a fiscal year that ended in November to a calendar year.

The bank's net revenues in investment banking in the first quarter were 823 million dollars, 30 percent lower than the first quarter of 2008 and 20 percent lower than the fourth quarter of 2008.

Its fixed income, currency and commodities business generated record quarterly net revenues of 6.56 billion dollars. The hefty 34 percent gain on its previous record reflects "strength across most businesses, including record results in interest rate products and commodities."

Goldman shares fell 1.19 percent to 128.60 dollars in after-hours trading, despite the announcement of a 35 cents per common share dividend. The stock had closed 4.68 percent higher on the New York Stock Exchange at 130.15 dollars.





A boy rides his bike at sunset in a park in Bucharest, Romania.AP Photo/Vadim Ghirda

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